Citi, the global US-bank has reached an agreement to divest its 21 branches in Texas to BB&T, which will enable the latter to emerge as a top-20 bank in the region.
BB&T will pay a premium to book value of 4.25% of core deposits and the expected premium is nearly $36m, based on 30 September 2013 balances.
As per the terms of the agreement, BB&T will buy all Citibank’s retail branches in the Austin, Bryan-College Station and San Antonio markets, including $1.2bn in deposits and $134m in loans.
Following completion of the transaction, BB&T’s footprint in Texas will increase to 81 financial centers, $2.8bn of deposits and $2.1bn of loans.
BB&T chairman and CEO Kelly King said, "This acquisition is a compelling strategic expansion in Texas, where the BB&T brand and approach to client service have been very well received."
BB&T community banking president Ricky Brown commented, "This acquisition is a great fit to leverage our current strategy and will allow our Texas operation to make an even bigger contribution to our future success."
Deutsche Bank Securities acted as financial adviser, while Wachtell, Lipton, Rosen & Katz served as legal counsel to BB&T for this transaction.
Based in Winston-Salem, NC., BB&T manages 1,824 financial centers in 12 states and Washington, D.C., and delivers a range of consumer and commercial banking, securities brokerage, asset management, mortgage and insurance products and services.